Labor News: 2005 in Review

By ALM Staff | Law Journal Newsletters |
January 03, 2006

More than 500 leaders and officials of the seven Change to Win federation unions met Nov. 17-19 in Las Vegas to strategize how to work together in organizing campaigns. Organizers, researchers, and communicators from each of the seven unions met to discuss campaigns and strategy to grow the labor movement. This marked perhaps the first time since the founding of the CIO in the 1930s that so many union officials met to discuss joint targeting and strategy.

Since a card-check and neutrality agreement took effect earlier in 2005, the Communications Workers of America organized more than 11,000 Cingular Wireless employees at former AT&T Wireless facilities around the country. Under the agreement, which went into effect July 1 for all former wireless units, Cingular agreed not to oppose union organizing efforts, and to recognize the union in a particular area if a majority of workers signed authorization cards. SEIU Local 925 won a union election among 10,000 home-based child-care providers in Washington State. The American Arbitration Association, which presided over the voting, mailed representation ballots to all home-based child-care providers that are licensed and/or paid by the state. Of the 3633 secret ballots that were returned by mail, 92% voted in favor of union representation.

Wal-Mart Workers of America (WWOA), a new national association for current and former Wal-Mart Stores workers, will sponsor a clearinghouse to supply information and services to employees outside a traditional union framework, according to the founding group, so-called Wake Up Wal-Mart. WWOA members can tap into information to increase understanding of their employment rights. One of WWOA's services gives members an opportunity to qualify for subsidies that Wake Up Wal-Mart has raised for uninsured workers. Members also will have access to a toll-free helpline.

Legislation and Politics

President Bush announced his intention to nominate Peter N. Kirsanow, a management attorney and a Republican member of the U.S. Commission on Civil Rights, to be a member of the NLRB. If confirmed by the Senate, he would serve a term that will expire on Aug. 27, 2008. Kirsanow is a labor and employment law partner with Benesch Friedlander Coplan & Aronoff in Cleveland.

On Nov. 15, Sen. Edward M. Kennedy (D-MA) and Rep. Rosa Delauro (D-CT) unveiled their “Anti-Wal-Mart Agenda,” a legislative package that links several workers' rights bills. Among other things, Delauro said Wal-Mart is a “serial violator” of child labor laws. She cited a recent Labor Department inspector general's report that found the agency's Wage and Hour Division had given “significant concessions” to Wal-Mart in a January settlement of charges of alleged child labor violations. Delauro also said Wal-Mart pays its women managers $5000 less, on average, than its male managers. Delauro and Kennedy timed the announcement of their legislative package to coincide with the premiere of a new documentary film that is harshly critical of Wal-Mart.

California voters rejected all eight measures supported by Gov. Schwar-zenegger in a special election on Nov. 8, including a measure that would have required public employee unions to get written permission before using member dues for political purposes.

Major Agreements and Negotiations

General Motors Corp. announced plans to cease some or all production at a dozen facilities across North America, and to eliminate 30,000 manufacturing jobs by 2008. GM said it hopes to achieve most of the job cuts through attrition and early retirement. Overall, the plan would cut the company's North American workforce of 173,000 employees by approximately 17%. GM planned to cease at least some of its operations at six assembly facilities in Oklahoma, Michigan, Tennessee, Georgia, Ohio, and On-tario, Canada. It also planned production cutbacks at stamping facilities in Michigan and Pennsylvania, parts facilities in Missouri, Oregon, and Michigan, and engine production plants in Ontario and Michigan.

GM's announcement came despite the United Auto Workers' recent ratification of an agreement to reduce GM's active and retired employee health care costs. Sixty-one percent of active workers approved the tentative agreement, reached Oct. 17 after months of discussion between the union and company. UAW leaders unanimously recommended that members endorse the agreement, which is expected to cut GM's annual employee health care expenses by about $3 billion before taxes for net savings of about $1 billion a year. GM's retiree health care liabilities are expected to decrease by about $15 billion, or 25% of the company's health care obligation to those beneficiaries. GM will continue, however, to provide health care benefits for its more than 750,000 U.S. hourly employees and dependents, retirees, and surviving spouses.

Six unions representing 33,650 employees at Delphi Corp. are coordinating their efforts to oppose the company's proposals to reduce wages, benefits, and jobs following its bankruptcy filing. The Mobilizing@Delphi Coalition said it combines the strength of 5.5 million active and retired members of six major unions. The coalition initiated a campaign to gather public support and to pressure Delphi to roll back its Oct. 21 demands for drastic concessions.

Approximately 1700 production and maintenance employees at Kellogg Co., represented by the Bakery, Confectionery, Tobacco Workers and Grain Millers, are covered under a new 4-year master contract that provides a $6000 signing bonus and freezes wages over term.

Some 5300 Philadelphia-area public transit workers ended a week-long strike against the Southeastern Pennsylvania Transportation Authority Nov. 7, after SEPTA and the two unions that represent the striking workers reached tentative agreements on new 4-year collective bargaining agreements. The proposed contracts provide for general wage increases totaling 12% over term, make pension and work rule changes, and for the first time require workers to pay part of the cost of their health benefits.

On Nov. 23, Titan Tire Corp. and the United Steelworkers reached a tentative agreement on a new contract for about 800 employees at a Goodyear Tire & Rubber Co. plant in Freeport, IL. Titan entered into an agreement to purchase the Goodyear plant, which produces farm tires, in February. However, Goodyear's collective bargaining contract for the employees at the Free-port plant contained a successorship clause that required a buyer to negotiate a new contract with the union prior to the completion of any sale. Details of the agreement are being withheld pending membership ratification.

Mail ratification ballots counted Nov. 18 showed that members of “Academics Come Together,” Local 7902 of the United Auto Workers, overwhelmingly voted to ratify a first contract with The New School University in New York. Agreement on the 4-year contract, which covers some 2000 part-time faculty at the university, was reached Oct. 31 in the face of a strike threat for later that day. The New School becomes the first private university to guarantee job security for part-time faculty. The contract also provides annual across-the-board increases of $10 per teaching hour in the first year, 2% plus $5 an hour in the second year, and 4.5% in the third and fourth years.

Through Nov. 21, data for all contract settlements showed that the average first-year wage increase was 3.1%, compared with 3.2% in the comparable period of 2004. The median first-year wage increase for settlements reported to date in 2005 was 3%, the same increase as that reported in 2004, and the weighted average increase was 2.7%, compared with 2.3% a year earlier. The average wage increase that will trigger in 2006 under contracts negotiated in earlier years is 3.2%, compared with 3.1% reported for 2005. The data also show that the median increase for 2006 is 3%, the same increase as that negotiated for 2005, and the weighted average increase is 3.1%, compared with 2.8% reported for 2005.

Labor Disputes

The number of work stoppages in the United States, including strikes and lockouts, is on the upswing as tensions rise between workers and companies seeking to cut wages and benefits, The Wall Street Journal reported Nov. 16. The trend extends beyond the troubled airline and auto industries, as evidenced by the continuing strikes of telecom workers at Sprint Corp. and machinists at Boeing's rocket division.

A 3-day strike by Transport Workers Union Local 100 following a breakdown in negotiations between the local and the New York City Metropolitan Transportation Authority crippled public transportation in the city and resulted in estimated business losses of tens of millions of dollars per day. The strike, which lasted from Dec. 20 through Dec. 22, ended with the union agreeing to come back to work and the parties coming back to the bargaining table. Talks had broken down with the MTA's last-minute proposal that bargaining unit members contribute significantly to their own pensions, a proposal that the union deemed completely unacceptable. Tensions ran high during the strike, with a state judge ordering fines of $1 million per day against the union for conducting a strike in violation of New York's “Taylor Law,” which prohibits striking by public employees. On Dec. 27, a week after the union launched the strike, the union board voted 37-4, with one abstention, to accept a 37-month contract. Pending ratification, the agreement calls for workers to pay 1.5% of their wages toward health care premiums, cutting into the raises of 3% in the first year, 4% in the second year and 3.5% in the third year. The subway and bus workers' current base pay averages $47,000 a year, and with overtime, their average yearly earnings total $55,000, The New York Times reported. The agreement on health premiums will save the MTA nearly $32 million a year.

In early November, graduate teaching assistants at NYU walked off the job and musicians at Radio City Music Hall remained locked out by Cablevision Systems Corp. It is unknown whether the surge in strikes will harm labor's already battered image, or if workers will be attracted to unions willing to strike over issues such as rising health care costs.

Members of the International Asso-ciation of Machinists struck eight Boeing space and defense division facilities in three states at 12:01 a.m., on Nov. 2 in a contract dispute focused on health care and pension issues. Boeing made its last, best, and final offer on Oct. 19.

Members of two different units of SEIU Local 715 have authorized their negotiating teams to call a strike, if necessary, at both Stanford University and Stanford Hospital and Clinics. Nearly 3000 workers are covered in the two units.

The president of New York University gave graduate and research assistants, who had been on strike since Nov. 9, until Dec. 5 to return to work without any consequences. Those who did not resume their duties by that date would lose their stipend and their eligibility to teach for the spring semester. The teaching assistants, who are represented by GSOC Local 2110 of the United Auto Workers, walked off their jobs Nov. 9 after NYU withdrew from bargaining for a successor contract following the NLRB's ruling that teaching assistants are not covered by the NLRA.

On Nov. 13, The United Steelwork-ers and other unions striking Asarco, LLC facilities in Arizona and Texas announced ratification of existing collective bargaining agreements that extends the contracts through Dec. 31, 2006, thus ending a 4-month strike. A federal bankruptcy judge in Corpus Christi, TX, was expected to approve the agreement during a Nov. 14 hearing, which is necessary to complete the process. While extending the existing contract provisions, the agreement also incorporates a new successorship clause that requires a new owner to recognize the unions before purchasing the company.

Members of UNITE HERE employed by hotels in major cities where collective bargaining agreements will be renegotiated in 2006, have beefed up their strike fund contributions in anticipation of a possible fight. In Chicago, hotel workers represented by UNITE HERE Local 1 voted in September to increase their strike fund contributions by $10 per month, from $2.30 to $12.30. UNITE HERE locals representing hotel workers in Toronto, New York, Hawaii, Los Angeles, and Boston already have similarly increased their strike fund contributions.

Crime and Corruption

The Department of Justice has charged a former administrator of a Chicago Local of the United Food and Commercial Workers with embezzling funds from the local's health and welfare plan. Patrick Fitzgerald, U.S. Attorney in the Northern District of Illinois, announced a one-count criminal indictment against Carol McCormack, who formerly served as office manager, controller, and director of personnel for UFCW Local 1 OO-A. The government charges McCormack with embezzling $110,310 from the local's health and welfare fund for her own use between September 1997 and October 2001.

Robert A. Georgine, formerly the president, chairman, and chief executive of ULLICO Inc., has agreed either to forfeit or reimburse the union-owned insurance company $13 million in cash and tax benefits in a settlement with the company of charges of breach of fiduciary duties. Since 2002, ULLICO has been under federal investigation and the target of several lawsuits for alleged insider trading and financial malfeasance by Georgine as well as numerous top officers and board members.

The 30-member executive council of the International Longshoremen's Asso-ciation made the union's Code of Ethics permanent, extended the term of its independent ethical practices counsel for 3 more years, and retained an independent appellate officer. ILA President John Bowers said the council voted to permanently include all these provisions by implementing the necessary resolutions and amendments to the union's constitution. To prevent the spread of corruption within the union, the ILA in 2004 adopted a code of ethics and announced the appointment of Michael F. Armstrong, a former federal prosecutor, to be its ethical practice counsel. Armstrong resigned after six months because the job was “not what he thought it would be,” and was replaced by former judge Milton Mollen, who has served in that capacity for about 18 months.

Airlines

A federal bankruptcy court judge approved a motion from Northwest Airlines seeking $114 million a year in temporary cuts in the wages and benefits paid to some 14,500 employees represented by the International Association of Machinists. Judge Allan Gropper of the U.S. Bankruptcy Court for the Southern District of New York authorized Northwest to reduce the wages paid to IAM-represented employees by 19% and to reduce sick pay to a rate of 75% of the prevailing wage rate after the temporary pay reduction. The court also approved interim agreements the airline reached last month with the Air Line Pilots Association and the Professional Flight Attendants Association, which together equal another $332 million in relief. The agreement with ALPA will reduce pilots' hourly pay rates by 23.9%.

Delta Airlines is seeking court authority to void its collective bargaining agreement with ALPA quickly to reduce pilot labor expenses by $325 million. The hearing before Judge Prudence C. Beatty was on Delta's filing of a Section 1113(c) motion, which if approved would allow the carrier to void its current bargaining agreement with the union. Delta filed the motion after it was unable to come to quick agreement with the union on the pay cuts. ALPA offered Nov. 9 to reduce its pilots' pay and benefits by $90.7 million annually. Delta had asked the pilots for a 20% cut in pay, as well as work rule changes and benefit reductions that would come to $325 million annually.

One day after filing for Chapter 11 bankruptcy, Flyi Inc., parent of Independence Air, announced Nov. 8 that it had reached tentative cost-cutting agreements with unions representing some 420 flight attendants and 250 mechanics. Flyi said the tentative agreement with the Aircraft Mechanics Fraternal Association would enact new wage rates and work rules for Independence Air mechanics, who have been negotiating on a contract since 2002. Flyi and the Association of Flight Attendants negotiators agreed to changes in pay rates and work rules in the current contract.

AFL-CIO

The AFL-CIO claimed that union efforts across the country were key in Nov. 8 election day defeats of California ballot measures it opposed, and in helping elect two Democratic governors it views as worker-friendly. Four ballot measures in California backed by Gov. Schwarzenegger and opposed by organized labor were defeated at the polls. Voters, meanwhile, chose Democrat Tim Kaine over Republican Jerry Kilgore in the Virginia governor's race, while New Jersey voters elected Sen. Jon Corzine (D) over Republican Douglas Forrester while also putting several union members in public office.

Sean McGarvey, general vice president at large for the Painters and Allied Trades, was elected secretary-treasurer of the AFL-CIO's Building and Con-struction Trades Department during an Oct. 27 meeting of the department's governing board of presidents in Las Vegas. McGarvey, who took office Nov. 1, was nominated to serve the remainder of the term of Joseph Maloney, who resigned from office last month for family health reasons.

In an effort to boost union organizing and political mobilization in Pennsylvania, some 200 state and local union leaders representing 1800 local unions throughout the state voted Nov. 4 to merge 30 central labor councils into five larger area federations. The restructuring is the first major reorganization of the Pennsylvania labor structure in 50 years, according to the AFL-CIO. The restructuring is part of an overall plan adopted earlier this year by delegates to the AFL-CIO convention to build stronger state and local movements. Under the Pennsyl-vania restructuring plan, the AFL-CIO said the 30 small central labor councils are being merged into five “powerhouse” area labor federations (ALFs).

The United Transportation Union announced that a proposed $5 per month dues increase failed to gain a two-thirds majority, and as a result, the union will not rejoin the AFL-CIO at this time. More than 60% of some 500 delegates from the union's last convention voted in a mail ballot referendum to approve the $5 increase. But the vote failed by fewer than 25 votes to reach the two-thirds majority required under the union's constitution. The vote was scheduled after the AFL-CIO Executive Council last month agreed to grant a charter to the 68,000-member UTU. The union disaffiliated from the federation in March 2000, citing irreconcilable differences.

Tom Leedham, the primary challenger to International Brotherhood of Teamsters General President James P. Hoffa in the union's November 2006 election made it clear that he plans to link the incumbent to a series of unpopular cuts made in the past few years to the pension benefits of workers participating in multiemployer pension funds. Leedham, who announced Oct. 31 that he would challenge Hoffa, received the endorsement of Teamsters for a Democratic Union at the group's 30th anniversary convention on Nov. 4-6 in St. Louis, MO. This will be the third time Leedham has taken on Hoffa for the union's top post. Leedham received approximately 40% of votes cast in 1998 and 35% in 2001. Leedham, currently the principal officer of IBT Local 206 in Portland, OR, served as an international vice president and director of the union's warehouse division under former president Ron Carey.